A Third Circuit Court in Nebraska has overturned a ruling against
Applied Underwriters Captive Risk Assurance Company, compelling arbitration between it and the South Jersey Sanitation Company.
Originally, a trial court had told the insurance company the contested issue required a court battle because state law in Nebraska prohibits the dispute resolution process for insurance cases.
But the latest ruling in this saga stated it’s up to the arbitrator to determine whether the reinsurance participation contract fell under an exception in Nebraska law.
The South Jersey Sanitation Company claims their contract with Applied Underwriters Captive Risk Assurance Company was procured based on fraud.
The Third Circuit Court ruled that the contention was related to the contract “as a whole”, and that means the arbitrator must decide if the case falls under a Nebraska legal exception.
That exception would determine if the case could go forward.
It is now up to the trial court to find a location for arbitration.
Related stories:
Federal judge claims AIG must defend Cosby
Legal & General merges UK, US insurance divisions
